Vene Sawmill, Inc., (VSI), purchases logs from independent timber contractors and processes the logs into three types of lumber products. These products are the result of a joint sawmill process that involves removal of bark from the logs, cutting the logs into a workable size (ranging from 8 to 16 feet in length), and then cutting the individual products from the logs. Joint Cost Information Per Unit Information dditional Information Product yields and average sales values on a per-unit basis from the joint process are as follows: Monthly Output of Materials at Fully Processed Splitoff Point Selling Price The joint process results in the following costs of products for typical month: Direct materials (rough timber logs) Debarking (labor and overhead) $ 500,000 Product 40,000 Studs 70,000 units $ 9 Sizing (labor and overhead) Product cutting (labor and overhead) Total joint costs 215,000 265,000 Decorative pieces 8,000 units 80 Posts 16,000 units 24 $ 1,020,000 The studs are sold as rough-cut lumber after emerging from the sawmill operation without further processing by Veno Sawmill. Also, the posts require no further processing beyond the splitoff point. The decorative pieces must be planed and further sized after emerging from the sawmill. This additional processing costs $100,000 per month and normally results in a loss of 10% of the units entering the process. Without this planing and sizing process, there is still an active intermediate market for the unfinished decorative pieces in which the selling price averages $60 per unit. Requirements 1. Based on the information given for Veno Sawmill, allocate the joint processing costs of $1,020,000 to the three products using: a. Sales value at splitoff method b. Physical-measure method (volume in units) c. NRV method 2. Prepare an analysis for Veno Sawmill that compares processing the decorative pieces further, as it currently does, with selling them as a rough-cut product immediately at splitoff. 3. Assume Veno Sawmill announced that in 6 months it will sell the unfinished decorative pieces at splitoff due to increasing competitive pressure. Select three types of likely behavior that will be demonstrated by the skilled labor in the planing-and-sizing process as a result of this announcement. How could this behavior be influenced by management